Chapter 7, Problem 12AP

(a)

To determine

Determine the final income, if individual P ends getting sick.

(b)

To determine

Explain the effect of standard contract on individual T’s expected income.

(c)

To determine

Explain whether the contract is fair or full for individual J.

(d)

To determine

Determine the set of possible value for individual R’s ${\text{I}}_{\text{H}},{\text{I}}_{\text{S}}\text{ and p}$.

(e)

To determine

Determine the upper bound for p and a lower bound for ${\text{I}}_{\text{H}}$.

(f)

To determine

Determine whether the given statement is true or false.